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Rail deliveries of US oil continue to increase in 2014

Hydrocarbon Engineering,

According to the US Energy Information Administration (EIA), the amount of crude oil and refined petroleum products moved by US railroads increased 9% during the first seven months of this year compared to the same period in 2013.

In July, the monthly average carloadings of oil and petroleum products was near 16 000 carloads per week, according to the Association of American Railroads (AAR). The increase in oil volumes transported by rail reflects rising US crude oil production, which reached an estimated 8.5 million bpd in June for the first time since July 1986.

AAR estimated that more than half of nearly 460 000 carloads tracked in its petroleum and petroleum products category from January through July consisted of crude oil, up from approximately 3% in 2009. With the average rail tank car holding up to 700 bbls of crude oil, approximately 759 000 bpd of crude oil were moved by rail during the first seven months of 2014, equal to 8% of US oil production.

The Bakken Shale, primarily in North Dakota, has provided a significant share of the total increase in US oil production over the past three years. North Dakota provides nearly one out of every eight barrels of oil produced in the US. Between 60% and 70% of the more than 1 million bpd of oil produced in the state has been transported to refineries by rail each month in the first half of 2014, according to the North Dakota Pipeline Authority.

In the future, proposed rules published in August by the US Department of Transportation to improve the safety of tank cars will affect how crude oil is moved by rail, particularly trains that carry 20 or more carloads of oil. The proposed rules would require new oil tank cars constructed after October 2015 to have thicker steel and require retrofitting of existing tank cars. Voluntary actions by railroads in anticipation of the new rules have resulted in reduced speeds and increased inspections.

Adapted from a press release by Emma McAleavey.

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